The Government has defended its controversial £1.2bn subsidy of BT’s upgrade of its national broadband network by publishing a study suggesting it will deliver benefits to the economy worth 20 times as much.

The scheme has been sharply criticised by MPs over its failure to award a single regional contract for fibre optic cabling in rural areas to any provider other than BT. The company’s rivals have complained that it means taxpayer funds are helping it re-establish the monopoly position it held in the early years of broadband adoption.

But Maria Miller, the Culture Secretary, said the subsidies were “excellent value for money” and would deliver economic growth, and increase national competitiveness. She cited a report commissioned by the government from the economists SQW.

Ms Miller said: “What this report shows us is that as well as superfast broadband being good for economic growth it will make even more of a positive impact on the way we live, helping us work more productively and get online faster.”

Dr Pantelis Koutroumpis of Imperial College, an adviser on the report, said: “The added capacity particularly affects small and medium businesses across industries, while the intervention helps address a growing digital divide.”

The authors estimated that by 2024 every pound of broadband subsidy will have returned £20 to the economy. Most of the benefit will come from increases in the productivity of businesses that rely on broadband will enjoy better coverage and higher internet access speeds, they said. The investment will also create 20,000 new jobs, SQW wrote.

The claims are unlikely to satisfy critics of the Government’s handling of broadband subsidies, who cried foul again this week when it was announced BT would pay £900m to acquire exclusive rights to broadcast European football over its upgraded network from 2015.

The Public Accounts Committee recently found the subsidy scheme had been “mismanaged” so that proper competition was absent and BT was granted a “quasi monopolistic position” over the new rural infrastructure.

Dido Harding, the chief executive of TalkTalk, this week said that “BT are a monopoly provider of fibre broadband”. She applauded moves by regulators towards controlling BT’s wholesale prices for faster broadband.